HomeMy WebLinkAbout2021-06-03 RMLD Citizens Advisory Board MinutesMr. Jason Small, Chair (North Reading); Mr. Vivek Soni, Vice Chair
(Reading); Mr. Dennis Kelley (Wilmington)
Members - Not Present:
Mr. George Hooper, Secretary (Wilmington); Mr. Joseph Markey (Lynnfield)
Others Present:
Mr. Robert Coulter, Board of Commissioners
Staff:
Ms. Coleen O'Brien, Mr. Hamid Jaffari, Ms. Wendy Markiewicz, Mr. Gregory
Phipps, Ms. Kathleen Rybak, Ms. Erica Morse, Mr. Brian Hatch, Mr. John
McDonagh
Mr. Zack Fentross and Mr. Andrew Gordon, Melanson
Public:
Mr. Robert Connor, Reading
Minutes Respectfully Submitted By: Mr. Jason Small, Chair ;swx,ghw
Topics of Discussion:
PER GOVERNOR BAKER'S MARCH 10, 2020, ORDER SUSPENDING CERTAIN PROVISIONS OF
THE OPEN MEETING LAW, G.L. c. 30A, §20 THIS MEETING WAS HELD REMOTELY VIA ZOOM
1. Call Meeting to Order - J. Small, Chair
Chair Small called the meeting of the Citizens' Advisory Board to order at 6:00 PM
and noted the meeting was being audio recorded.
2. Approval of Minutes-). Small, Chair
Mr. Soni made a motion, seconded by Mr. Kelley, that the Citizens' Advisory Board
approve the minutes of September 16, 2020, meeting as written. Motion carried
3:0:2 (3 in favor, 0 opposed, 2 absent) by a roll vote of those present Mr. Soni, aye;
Mr. Kelley, aye; Chair Small, aye. Mr. Hooper and Mr. Markey were not present.
3. Report from the Board of Commissioners - R. Coulter, Commissioner
Mr. Coulter reported that the RMLD Board of Commissioners attended the Reading
Select Board meeting. The MACP presented on the Green Communities Designation.
The presentation discussed how efforts to conserve 20 percent of energy over the
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RECEIVED
TOWN CLERK
Town of Reading
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2021 OCT 21 PM 3:25
Board. committee - Commission - Council:
RMLD Citizens Advisory Board
Date: 2021-06-03 Time: 6:00 PM
Building: Location:
Address: Session:
Purpose: General Business Version:
Attendees: Members - Present:
Mr. Jason Small, Chair (North Reading); Mr. Vivek Soni, Vice Chair
(Reading); Mr. Dennis Kelley (Wilmington)
Members - Not Present:
Mr. George Hooper, Secretary (Wilmington); Mr. Joseph Markey (Lynnfield)
Others Present:
Mr. Robert Coulter, Board of Commissioners
Staff:
Ms. Coleen O'Brien, Mr. Hamid Jaffari, Ms. Wendy Markiewicz, Mr. Gregory
Phipps, Ms. Kathleen Rybak, Ms. Erica Morse, Mr. Brian Hatch, Mr. John
McDonagh
Mr. Zack Fentross and Mr. Andrew Gordon, Melanson
Public:
Mr. Robert Connor, Reading
Minutes Respectfully Submitted By: Mr. Jason Small, Chair ;swx,ghw
Topics of Discussion:
PER GOVERNOR BAKER'S MARCH 10, 2020, ORDER SUSPENDING CERTAIN PROVISIONS OF
THE OPEN MEETING LAW, G.L. c. 30A, §20 THIS MEETING WAS HELD REMOTELY VIA ZOOM
1. Call Meeting to Order - J. Small, Chair
Chair Small called the meeting of the Citizens' Advisory Board to order at 6:00 PM
and noted the meeting was being audio recorded.
2. Approval of Minutes-). Small, Chair
Mr. Soni made a motion, seconded by Mr. Kelley, that the Citizens' Advisory Board
approve the minutes of September 16, 2020, meeting as written. Motion carried
3:0:2 (3 in favor, 0 opposed, 2 absent) by a roll vote of those present Mr. Soni, aye;
Mr. Kelley, aye; Chair Small, aye. Mr. Hooper and Mr. Markey were not present.
3. Report from the Board of Commissioners - R. Coulter, Commissioner
Mr. Coulter reported that the RMLD Board of Commissioners attended the Reading
Select Board meeting. The MACP presented on the Green Communities Designation.
The presentation discussed how efforts to conserve 20 percent of energy over the
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next five years, including DOER fleet compliance. RMLD is already in compliance,
based on the existing procedures that have been in place.
4, General Manager's Report - C. O'Brien, General Manager
. Community Update
Ms. O'Brien reported on the following community events
This event was held on April 27th attended by 75+ people. The roundtable was
informative and provided excellent feedback. Some community TV stations will be
broadcasting the event. RMLD plans to have another EV Workshop in September
during the National Drive Week. The RMLD will likely have an additional heat pump
round table before year end.
Hiah School Art Contest Virtual Awards Ceremony
This event was held on May 12th. The RMLD thanked Messrs. Pacino and Stempeck
for their attendance, as well as giving out the awards. The winner will be displayed
on the front cover of the RMLD Annual Report, which is scheduled to be issues by the
end of June.
YMCA's Healthy Kids Day
The RMLD participated In Burbank YMCA's Healthy Kids Day on May 22^O presented
electrical safety information to the children in attendance.
Virtual "Eledrification" Presentation
This will be taking place on June 711 at 2:30 PM in partnership with the Wilmington,
Reading, and North Reading libraries.
Wllminaton Farmer's Market
This event will be taking place on June 27°^; the RMLD will be at the community table
from 10:00 AM to 2:00 PM.
2020 Shred the Peak
RMLD will be making a statement clarifying that the "Shred the Peak" is the overall
program; the "Peak Demand Reduction pilot program" is for commercial and
industrial customers; "Shred the Peak" is for residential.
Northeast Public Power Association (NEPPA) Annual Conference - Aua st 22-25
2021 at the Westin Portland Harborview, in Portland Maine
Ms. O'Brien explained that per the Citizens' Advisory Board (CAB) policy, it requires
that a vote be taken for CAB members who want to attend the NEPPA Annual
Conference. The consensus was to have four CAB members get approval to attend
the conference.
Mr. Soni made a motion, seconded by Mr. Kelley, that the Citizens' Advisory Board
approve travel to, and attendance at, the NEPPA Annual Conference to take place
August 22-25, 2021, at the Westin Portland Harborview in Portland, Maine, for Jason
Small, Vivek Soni, George Hooper, and Joseph Markey. Mr. Kelley will not be
attending. Motion carried 3:0:2 (3 in favor, 0 opposed, 2 absent) by a roll vote of
those present Mr. Soni, aye; Mr. Kelley, aye, Chair Small, aye. Mr. Hooper and Mr.
Markey were not present.
5. Presentation of 2020 Financial Audit Findings as Presented to the Audit Committee
A. Gordon, Audit Supervisor, Melanson
Materials: Board Packet; Annual Financial Statements; Financial Report
Ms. Markiewicz introduced Andrew Gordon and Zack Fentress from Melanson. This is
the first time the auditing findings have been presented to the CAB.
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Mr. Gordon presented the financial statements in a comparative basis for the first
time in years. The reason for the lack of comparative statements in the past was
because the department moved to a December 31 year end as well as the
implementation of Governmental Accounting Standard Board (GASB) 74 and 75.
The takeaway of the 2020 Audit findings was that the department had positive
operating results; a well -funded OPEB Trust Fund; and there was no management
letter. RMLD received a clean opinion; the best opinion you can receive from an
Independent Audit; and there are no exceptions. This opinion is consistent with
prior year with prior years.
Mr. Gordon reported that the net of accumulated depreciation increased from CY19
by approximately $2.4m. This increase consists of $7.3m in additions to capital
assets less $4.7m depreciation expense for the year.
The net pension liability, which is the department's portion of total unfunded liability
for the Reading Contributory Retirement System (measured as of December 31,
2019), decreased $2.5m from the prior year. The primary reason for the decrease is
due to the Retirement System's investment results coming in greater than
anticipated ($10.1m); of that, RMLD's benefit was about $2.9m. RMLD's
proportionate share of total unfunded liability is about 28.35°/x. The Reading
Retirement System is funded higher at 78.24% than the average seen in the
Commonwealth (66%). The RMLD set aside $6.6m to fund future appropriations to
the retirement system. These funds (Per GASB) cannot be used to reduce the net
pension liability. The primary reason for the decrease is due to the Retirement
System's investment results coming in greater than anticipated in 2019, $10.m; of
that, RMLD's portion of benefit was about $2.9m.
Mr. Gordon stated that the net OPEB liability balance increased $7.2k from the prior
year. Mr. Gordon reported on the required supplementary information for the
department's other post -employment benefits, which includes health insurance and
other health care benefits that the department provides for employees
Mr. Gordon reported on the required supplementary information for the
department's Other Post -Employment benefits, which includes health insurance and
other health care benefits that the department provides for employees. Mr. Gordon
pointed the total OPEB liability for 2020 $11.6m and the plan fiduciary net position
$4.5m; these figures demonstrate that the department has funded the total OPEB
liability at approximately 38.62%. Most towns and cities are between 1% to 10%
funded; light departments in the Commonwealth are between 20% to 40% funded.
RMLD has a strong position in terms of funding the total OPER liability.
Mr. Gordon noted there was a decrease of $2.5m in electric sales, net of discounts,
in conjunction with a $3.7m decrease of purchase power. The decrease in both
these items was primarily due to the decrease in cost of power from 2019-2020.
The cost savings that RMLD saw as a result passed through to the customer,
causing a decrease in both electric sale and purchase power operating expense.
Mr. Gordon stated that as part of the audit procedures, they look at the liquidity of
the department. The cash on hand is compared to the department's operating
expense to come up with a ratio. He then explained the items used to calculate the
cash on hand. RMLD has enough cash on hand to cover just three months of
operating expenditures. Typically, a good ratio is to have enough cash to cover
three months of operating expenditures. This figure is up from the prior year, 2019
which was 2.97 months.
6. Integrated Resources Report - G. Phipps, Director of Integrated Resources
Materials: Intergraded Resources Report - dated lune 3, 2021 (presentation Slides)
ease 13
Mr. Phipps reported that he will covering a power portfolio addition - a third hydro
project, renewable choice update as part of Policy 30, Revision 1, as well as key
economic power supply related drivers.
Due to the Climate Bill which has been discussed at prior meetings, non -carbon
projects are at a premium. RMLD has stepped up its efforts for non -carbon projects
such as solar, hydro or wind. RMLD has the Rox Wind Project that was contracted a
year ago. Rox Wind is in the construction phase, likely to come online at the end of
this year However, there are very few solar and wind projects to purchase power
from. RMLD in conjunction with Energy New England would likely participate in
offshore wind projects if they avail themselves along with other MLPs.
New York Hvdro Power Supply opportunity Slide 3
Mr. Phipps stated that the RMLD is presenting a third Hydro Power Supply
opportunity; a Gravity project currently referred to as Plant #4 located in Eastern
New York.
This supply opportunity is of interest to RMLD for the following reasons: The project
supplies power into ISO New England therefore from a distribution and transmission
perspective It is well suited. Upstream is a massively wide watershed area which
translates into more consistent power generation. There are no known environmental
issues, partly because of age (200 years) and partly because these hydro plants go
through extensive regulatory process at the federal, state, and local level. It is an
approximately 31,000 megawatt hours per year unit, which represents just under
5% of RMLD's total load. It will have Massachusetts Class II certificates. RMLD's
preference is to buy associated certificates with the power contracts. This project is
priced a little below RMLD's average for hydro. Given the timing of the market, the
value of the certificates, as well as the volume and pricing the opportunity is a good
fit for the RMLD.
Mr. Soni asked a question clarifying the length of the contract and the pricing. Mr.
Phipps responded that it would be a 25 -year contract and the pricing for the most
part would be a level fixed cost going forward. The first three years are at a lower
level fixed cost and will increase up to a determined fixed level cost which is below
RMLD's general average.
Mr. Soni commented that upgrades were performed in 2019 on this project, and
asked if there are any FERC associated approvals required? If so, what is the timing?
Mr. Phipps stated that there will be another FERC relicensing. Most hydro projects
have been around for a long period of time, and most issues have been Flushed out
during that history. The owner is not expecting any surprises from the due diligence
that will be performed for the relicensing process.
Mr. Soni asked a question clarifying the motion phrasing "after completion of proper
due diligence,". Mr. Phipps explained that besides RMLD performing its basic due
diligence on the site, the Board of Commissioners asked to look at the
environmental, and a basic social economic due diligence. Mr. Phipps said that the
due diligence on the Dahowa Hydro Project is expected to come back clean. A similar
process will be taken by a third party performing the environmental due diligence
which is part of RMLD's process. Mr. Phipps noted that hydro projects are heavily
regulated at both the federal and state levels including the local level.
Mr. Connor asked a question regarding Gravity's hydro sites, and specifically project
#4. Mr. Phipps responded that the department does know the location of the project
#4. The reason why it is being called the Plant #4 is because it is in a new contract
process. Currently, it is being operated and managed by Gravity.
Mr. Phipps noted that because the existing contract is terminating, Gravity has
decided to purchase the project and has not yet submitted a request for license
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reassignment. Gravity is currently finalizing their negotiations. Gravity asked RMLD
not to disclose with the actual location until the contract is finalized.
Mr. Soni made a motion, seconded by Mr. Kelley, that Citizens' Advisory Board
recommend that the Board of Commissioners vote to accept the General Manager's
recommendation to execute a contract after proper due diligence, with Gravity
Renewables for energy, including associated certificates, from a hydra facility in New
York, known as plant #4. Motion carried 3:0'.2 (3 in favor, 0 opposed, 2 absent) Mr.
Soni, aye; Mr. Kelley, aye; Chair Small, aye. Mr. Hooper and Mr. Markey were not
present.
Mr. Phipps provided an update on the Dahowa Hydro Project, also located In New
York. RMLD received the due diligence report which concluded that there is sufficient
information about the facility, positive local and environmental benefits, as well as
limited associated risks. Based on the report findings, RMLD will continue moving
forward with the contract (previously approved). The due diligence on the
environmental and social environmental impacts were requested at the last Board of
Commissioners meeting.
Renewable C;hglo gL 9ther Ml Slide 4
Mr. Phipps reported that there are five MLP's that offer a Renewable Choice Program
(Belmont, Wellesley, Shrewsbury, Middleborough, Taunton). Each program is unique
to reflect the power portfolio, the rate base characterization, and the size of those
individual MLPs. Taunton has a higher concentration of C&I in contrast to Belmont,
Wellesley, and Middleton, who are primary residential; Shrewsbury is a mix. Each of
these programs are "opt In."
Mr. Phipps started that Wellesley Municipal Light Plant is replacing their voluntary
renewable energy program with Wellesley Electric Customers Accelerated Reduction
of Emission "WECARE" program. The structure of WECARE is to collect a four percent
increase is applied to all rate payers with few exceptions. Customers who do not wish
to pay the additional 4% increase must opt out of the program. Mr. Phipps noted
only 15% of the WECARE funds will be used to buy renewable certificates. The
balance is used to fund current and future projects.
Renewable Choice - update Slide 5
The goal of the RMLD Renewable Choice Program is to offer an option for ratepayers
that want to be either 100% renewable or non -carbon. This program allows
customers who want to participate the opportunity to do so at an incremental pace
and provides an option for ratepayers to participate at a 100% level.
Renewable Choice Program will focus on non -carbon and the ratepayers will be given
two options within the program. One level will focus on retiring MA Class I
certificates and the other focus on a mix of non -carbon certificates (EFECs up to MA
Class IS). The program is being envisioned as a one-year commitment at a fixed rate
of dollars per kWh. Funds that are collected will be allocated towards retiring a larger
portion of certificates.
The RMLD is looking at the energy portfolio and certificate portfolio changes over
time. The department wants to ensure any new programs are easy to administer and
are straightforward for ratepayers to make an informed decision.
Renewable h mechanism Illustration Slide - 6
Mr. Phipps noted that the since the RMLD is retiring 2394. of certificates this year, the
goal is offer programs to fund from 23% to 100°/%, the remaining 77%.
The goal of the Renewable Choice Program is to retire more certificates in RMLD's
portfolio annually. Mr. Phipps noted that particularly for the industrial and
commercial sector, a buy more than retire model could be explored if there is a
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request to purchase specific types of certificates. In all scenarios, the RMLD will be
using the incremental funds to retire an additional block of certificates.
L(�y Financial fsl Drivers at RMLD -Slide 8
Mr. Phipps reported on the key financial drivers at Reading Municipal Light
Department. There are five major blocks in the cost structure at RMLD, one of those
being the operating cost (Currently 30-33%); which includes the equipment, all of
the distribution network, labor, and anything within the RMLD territory that RMLD
will manage and operate. Overtime, this operating cost will go down as a percentage
of total costs, partially because of the compound annual growth rate (CAGR) of the
other cost blocks is higher. Energy, transmission, capacity, and certificates make up
the balance of the costs' categories. Energy is 30% of RMLD's cost structure. The
other two big pieces are transmission and capacity; RMLD has active programs to
manage those costs.
RMLD's retirement of certificates will add to RMLD's overall cost structure. In 2025,
certificates will be approximately 5%, growing at a rate of about 15% CAGR driven
primarily by the number of certificates that RMLD has to retire annually.
Mr. Connor clarified that Mr. Phipps said that it would be 23% of the 39%, you
meant 23% of the total. Mr. Phipps responded he corrected himself 23% of the total.
Policy 9 - Procurement Request - B. Hatch, Director of Information Technology
Materials: RMLD New IT Production Environment with Disaster Recovery (DR) Backup
Solution
Mr. Hatch reported on the importance and time sensitivity of implementing the new
RMLD IT Production Environment with Disaster Recovery (DR) project. Mr. Hatch
stated that an upgrade and replacement of RMLD's production environment, as well
as a new backup solution (utilizing the latest and greatest technology) having a
disaster coverage site that is outside of New England will rovidea better, or ^cems with
r, and
more responsive atmosphere if there are any issues, problems,
RMLD's data assets.
RMLD performed a comprehensive assessment for the upgrade to its IT production
environment. The backup solution and identifying where disaster recovery coloration
should be with the connectivity to that location. The ability to perform essential
backups, more importantly the ability to provide restoration of those backups when
needed if we have an issue, problem, or concern as did last year were addressed.
The goal is to upgrade the production environment, in order that it is future proof
and ready to take on the issues of tomorrow.
Mr. Hatch then addressed some of the specifics for the costs associated with this
project, cognizant of the information being put presented is guarded to circumvent
RMLD from an attack, hack, ransom war, etc.
RMLD will be putting in a new production environment and then would repurpose the
current environment in disaster recovery. This new environment would last
approximately four to five years. This could be depreciated each year after that or
after the entire five years and we would need four of the products that we had be
using that are considered industry top notch.
Mr. Hatch explained all phases of the new IT Production System with Backups
Disaster Recovery and their associated costs. RMLD has put a cap on this as it is
unbudgeted, but we would be using the state contract of a maximum of $420,000.
But as we see it today, we are looking at $414,000. (Slide 4)
Ms. O'Brien explained that this is not in the existing RMLD capital budget, therefore
this is being presented. This is part of our assessment, analysis and hiring Brian to
look at RMLD's IT environment. Both the CAB and RMLD Board will be voting on this.
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Mr. Soni asked because of what RMLD experienced last year In terms of backup, is
part of RMLD's strategy is to spend funds on cyber security? Mr. Hatch responded
that cyber security is part of this. Ms. O'Brien interjected that any further
conversation needs to be discussed in executive session to ensure the integrity of
RMLD's IT infrastructure is not compromised. Ms. O'Brien added that RMLD presently
has backups and upgrades consistent with NERC and cyber security requirements.
Mrs. Markiewicz added that for Cy 21 budget over half a million dollars is for
hardware and software upgrades in addition there is half a million In the operating
budget for continued maintenance and licenses.
Mr. Kelley noted that the redundancy and disaster recovery with having offsite places
would be of benefit not to be at the mercy of somebody if something was to happen.
Chair Small agreed with Mr. Kelley it would be consistent with NERC standards this
should be done.
Mr. Soni made a motion, seconded by Mr. Kelley, that the Citizens' Advisory Board
recommend that the Board of Commissioners authorize the General Manager to
move forward with the RMLD New Production Environment with Disaster Recovery
Project, as presented. Staff will solicit quotes from the State contract and award
contracts for the project, not to exceed $420,000 in Cy2021. This un -budgeted
project will be paid from the Depreciation and Operating Funds. Motion carried 3:0:2
(3 in favor, 0 opposed, 2 absent) by a roll vote of those present Mr. Kelley, aye;
Vivek Soni, aye; and Chair Small aye. Mr. Hooper and Mr. Markey were not present.
8. Scheduling - J. Small, Chair
Next CAB Meeting
BOC Meeting Coverage Tentatively Scheduled for July 22,
Ms. Rybak will send out an e-mail to confirm BOC meeting date.
Mr. Kelley asked if the meetings will be In person or continue with Zoom? Ms. Rybak
responded that the Governor has extended it until September 2021, but the RMLD
will be providing guidance in the meantime.
Ms. O'Brien mentioned that she has reached out to the Town of Lynnfeld about
representation at CAB meetings. There has not been a Lynnfield representative at
the meetings. Ms. O'Brien is waiting to hear from the town.
9. Adjournment - 1. Small, Chair
Mr. Kelley made a motion, seconded by Mr. Soni, that the Citizens' Advisory Board
adjourn regular session. Motion carried 3:0:2 (3 in favor, 0 opposed, 2 absent) by a
roll vote of those present. Vivek Soni, aye; Dennis Kelley, aye; and Chair Small, aye.
Mr. Hooper and Mr. Markey were not present.
The CAB meeting adjourned at 7:07 PM.
As approved on October 20, 2021.
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